Although boats are wonderful recreational items, maintaining and using a boat can quickly become expensive. For those lucky enough to live close to major bodies of water, marina costs can add up. While boaters living further away from water don’t have to rent berths, transporting boats is a time-consuming, expensive endeavor. People who are looking to simplify their lives can donate their boats to gain tax advantages and benefit the less fortunate. Donating a boat is a great way to give back to the communities that enrich our lives. People can donate to scouting groups, thrift stores and other non-profit organizations. Donated boats are used to give needy groups special outdoor experiences. Alternatively, the boats are sold to the public to raise cash for other worthy activities.
People can take a few basic steps to improve the positive effects of donating a boat. For example, it is a good idea for donors to avoid middlemen whenever possible. Only in rare cases do for-profit intermediaries really provide critical services. In many cases, these for-profit groups keep more than 50 percent of the value of the donations they handle. Sadly, these people profit illicitly from the desire to donate boat owners express in good faith. To donate a boat with absolute assurance, donate directly to a reputable charity.
Of course, some charities are problematic as well. Less reputable charities are so poorly managed that they use most of their resources for salaries and operating costs. Generally speaking, it is wise to donate to charities with low administration costs and reputations for integrity. Organizations like the Better Business Bureau and Charity Navigator provide critical insights into the relative value of various charities. Even reputable charities may not have much experience with boats. Make sure the charity you choose will take its time selling the boat in a reasonable manner. Some charities are so fast-paced they quickly ship boats to auctions without due consideration. A thoughtful, slower approach is better for donors and for charity beneficiaries.
Desire to help is the main motivation to donate boat owners harbor. At the same time, it is always nice to deduct the value of high-ticket donations from your taxable income. To ensure that the donation qualifies for a deduction, always donate to a certified 503(c)(3) organization. These groups meet government requirements and are officially designated as tax exempt. The IRS maintains a complete list of qualifying organizations online. Known as Publication 78, this searchable index is a primary resource for serious donors. If you estimate that the boat is worth more than $500, prepare to provide the IRS with paperwork demonstrating the boat’s actual value. If the donated boat is ultimately sold, the IRS will want to review that sale. If the boat is kept and used by the charity in question, value assessment requirements are not as stringent. For most donated boats, the IRS will want proof of donation. In most cases, this is simply a receipt from the charity. Boats valued at $5000 and higher always need appraisal documentation.
In rare cases, people might have to choose between using a for-profit intermediary or not donating at all. For example, one might not have the time or resources to deliver a boat to an appropriate charity. In these cases, it may make sense to hire an intermediary to pick up the boat. Before making this arrangement, investigate to learn how the intermediary disposes of funds. Organizations that won’t give specific answers are not worth dealing with. To donate a boat with confidence, make sure to fulfill all local laws and statues. Especially for larger boats, drawing up and transferring a title is often advisable. This measure ensures that donors won’t face parking tickets or other violations if donated boats are not properly disposed of.
People who are moving or disposing of an estate may have quite a few big-ticket items to donate. Individuals planning to donate goods worth $10,000 or more might consult a tax accountant for IRS compliance tips. Tax returns with unusually plentiful deductions can prompt audits. Furthermore, audits can can cost taxpayers more than they saved by claiming deductions. In some ways, boat donation is more complex than the average person might suppose. However, this shouldn’t dissuade anyone from donating their boats for worthy causes. Without the efforts of charitable individuals, the neediest members of society would suffer immensely. Boat donations are a critical part of our nationwide effort to create a fair society.